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Community Development

Show All Answers

1. Is this where I come to buy a home if I have bad credit?

The City does not look into your credit history. Our assistance is provided to eligible applicants that are able to receive a loan from a lender for the mortgage financing. The lender has certain criteria for underwriting their loans. If your credit is less than desirable the lender will let you know and you are entitled to receive a credit report and explanations on why you were denied at this time. Ask your lender what you can do to change the situation and how long it might take to do so. In the application brochure is a list of Housing Counselors, these agencies can help you get on the right track.

2. I applied for the program and received a preliminary approval letter from you. Does this mean I qualify to buy a home?

The City basically looks at 2 things. First, we verify that you haven't owned a home in the last 3 years and that your income is within the guidelines for receiving assistance. This means we only look to see that your income is not above our maximum guidelines. When you receive the preliminary approval letter from us, that means you are income eligible to participate in our program.

3. I had a job that had me over the income limits but now I am on unemployment, do I qualify for your program?

The City looks at your current income situation but, we have to make sure that our program does not provide opportunities for abuse. Therefore we look at your income for the last 3 years before determining if you qualify. If your situation has changed from a previous year we won't automatically disqualify you but, we will fully analyze your situation before giving approval. Things we look at are unemployment situation, temporary leaves of absence, workman's compensation etc.

4. What if my income changes at a later date?

If your income changes after receiving preliminary approval we need to have the information immediately. From the time that you apply for our program until the closing on a purchase, your income will be scrutinized by the lender, their underwriters, as well as the Montana Board of Housing. If any of these parties discovers something that wasn't disclosed or a change it can ruin the transaction which can be very disheartening. If you close later than 6 months after receiving the preliminary approval letter the City is required to re-verify your income before the closing. If you are getting a raise, a second job or anything that changes your income, you need to disclose it. If your income should change after you have purchased a home you are not effected by this.

5. I work more than one job which puts me over the limit. What if I or a member of my family quits one of these jobs?

Our program assists those most in need. We must assure that our program is not abused in any way. Although having more than one job to make ends meet is not always desirable, we cannot get into a situation where a person does something to qualify and then possibly gets the job back after receiving our assistance.

6. Why do you need income on people over the age of 18 when the house will be in just my name?

Once again we have to assure that our program is not abused. A person purchasing a home may have a spouse that has bad credit and together couldn't qualify for a home with this credit situation or 2 adults may be living together. These situations are allowed, but we do look at the fact that if someone over 18 is living in your home any income they receive can help with living expenses and needs to be looked at for qualification.

7. Who should be getting you the information regarding our application?

Responsibility for receiving the application, tax returns, good faith and buy-sell falls on the applicant. Many lenders and Realtors will do this for the applicant, but the applicant should be the one that makes sure we receive all the pertinent information. This lets you maintain control and lessens the possibility for error and keeps you informed.

8. I am a displaced homemaker and have owned a home in the last 3 years. Do I qualify?

We look at each applicant's situation individually. A displaced homemaker can qualify but we need to assess the home that was owned jointly. Did you receive any funds from terminating your portion of ownership? If so what was the amount, do you still have these funds, how were the funds spent?

9. I own a mobile home. Do I qualify?

This depends on a number of situations. The age of the home, do you own the land, the condition of the home. You will be required to sell the home. If you sell the home, will you receive enough proceeds to purchase a home without City assistance?

10. Can I buy a "Manufactured Home"?

This program can only assist with manufactured homes that are permanently affixed to an FHA approved foundation and on land owned by the purchaser. In other words, an manufactured home in a trailer park where you rent the lot space would not qualify. Manufactured homes can only be placed in areas that allow manufactured housing. Caution: Some areas may have manufactured homes in a residential area. These homes were built before zoning may have been in place and are considered grandfathered in. We cannot assist with these so you must research such homes thoroughly before making an offer to purchase.

11. How do I buy a HUD Home?

HUD homes are homes that HUD has received through foreclosure. Your Real Estate Agent' is authorized to show these homes and assist people with making offers.

12. Can I buy a home in Lockwood?

No. The City's program can only assist with purchases that are in the City limits. Lockwood is not in the City limits. There are also pockets of land around the City that are not considered in the City. We cannot assist with these and if in doubt ask your Realtor to research this for you.

13. I applied for the program last year. Do I need to apply for the program again?

We can only keep an application active for 6 months. After that time you will need to fill out a new application with any tax returns we may not have.

14. Do I have to use a Real Estate Agent to buy a home?

You do not need to use a Realtor to buy a home but buying a home can be a complicated and emotional experience. It is wise to use a Realtor to assist in buying a home. They have a strong knowledge of the process and can make the purchase proceed smoothly. If you don't use a Realtor I would caution that you obtain some type of legal advice and not let the seller control the sale. Although they may be honest in working with you the bottom line is that they are going to do what's in their best interest. I also would recommend that while searching for a home, use a Realtor that is not the listing agent. The listing Realtor will be honest and work with you but their responsibility is to get what's best for their seller.

15. Do I have to attend the City's Homebuyer Workshop? Can I wait until I find a home so that I don't waste my time if I can't find a home?

Attending the workshop will probably be the most important thing you do regarding buying a home. The workshop covers the whole process and will answer many questions you may have or never thought to ask. The workshop will be attended by other applicants with their own set of questions and you should come away with the feeling that will make you feel comfortable with the journey you are about to embark on. Don't wait to attend. These workshops are only given once a month and you don't want to get into a situation where this requirement holds up or destroys your purchase. Even if you can't purchase a home at this time you will at least have the knowledge you need when you do finally go through the process. It is better to get all the information beforehand rather than after to avoid needless mistakes.

16. How long do I have to find a home? Once I'm approved don't you hold the funds for me?

Funds are available until they run out for the year. As the program has gained popularity the funds have diminished quicker. We receive our funding in July and in the past most recent years we ran out of funding by November. Funds are not committed until we receive from an applicant that has received preliminary approval, a copy of the buy-sell and a good faith estimate. At that time we issue a final approval letter which authorizes the lender to proceed. This commits the funds. If funds continue to go as fast as they have been, I would recommend that you talk to your lender or call our office regarding the status of funding before making an offer to purchase. Good communication can avoid major disappointment.

17. Funds are available until they run out for the year. As the program has gained popularity the funds have diminished quicker. We receive our funding in July and in the past most recent years we ran out

Yes. The City's funds are given as a deferred loan. Upon issuance you will sign a Trust Indenture and Deed Restriction outlining the terms and conditions. These terms are for the length of the mortgage (30 years). If you move out of the home, sell it or change it's use, you’ll trigger paying back the loan. If you pay back the loan you only pay the amount that was loaned. There is no interest charged.

18. I heard that if we use the City program, we cannot take out a loan on the property. Is this true?

Yes, the terms of the loan allow certain conditions in which we would forgive paying back the loan. Because of these conditions the City puts itself at greater risk if we allow the homeowner to remove the equity from the home through a home equity loan. The City remains in what is known as a second position behind the mortgage. This means that should you default or sell the home, the mortgage gets paid first then the City receives it's funds with any remaining funds going to the homeowner. Often lenders will ask us to take a third position behind the home equity loan which we will not do for the reason just stated. Many of our applicants have taken out home equity loans as they have gained equity and used a portion of the funds to repay us the funds assisted. This will release the restrictions on the property. The City then reinvests the funds into our program allowing us the opportunity to assist another applicant.

19. The City program inspected my home, does this mean that it is safe and up to code? Do I need to have a home inspection?

Although the City's Inspection is fairly thorough. We are not certified inspectors that guarantee the condition of the home. When the City inspects your home we look at a number of things: Is the size of the home suitable to the size of the family? Do the bedrooms meet code, are the mechanics of the home proper, does the home meet minimum criteria for livability. The results of the inspection are what we perceive the house to be. The appraiser's inspection is to determine the value of the home and not to guarantee the condition. It is a good idea for you to get a licensed inspector if you are not sure of the condition of the home.

20. The City inspected my home and it was determined that repairs are needed. Who is responsible for these repairs?

Repairs the City requires generally are items that the seller should have repaired before selling the home and we encourage you and your lender and realtor to get the seller to make these repairs. The City funds cannot be used for repairs. The appraiser may also require repairs and these should definitely be completed by the seller. The appraiser is basically giving a value to the property on the condition that these repairs are made. This should not be an added expense for the home buyer.

21. Can you inspect the home before we make an offer to purchase it?

Our staff and resources are small and we can not afford the time involved to make an inspection for property that does not yet have an offer accepted. Your Realtor should have the knowledge and resources to determine if a home is going to meet the requirements without major additional expense. Once you turn in a copy of the buy-sell to our office we will as soon as feasibly possible do an inspection. You and your lender will receive a letter from me indicating the results of my inspection.

22. If I buy the home and discover a problem with the house, who is responsible for the repairs?

This has happened on occasion and that is why I stress the importance of you the home buyer being comfortable with your purchase by having qualified people assist you. Older homes are not always perfect and repairs are going to arise. If you aren't sure about the furnace, water heater, sewer, roof or any item in the home have these items checked by the proper people. Have the seller fill out and sign a disclosure statement on the condition of the home. If any problems occur after you have taken possession, resolving these issues is between you and the seller and may have to be addressed in civil court. Ask your Realtor what they will do to assist you if this should occur. Extreme caution should be practiced regarding this because you are liable for providing the burden of proof that the seller knew of an existing problem.